COLOMBO, April 21: The Sri Lankan government warned traders on Monday it would use security forces and the police to crack down on dealers suspected of hoarding rice following government-imposed price controls.

Consumer Affairs Minister Bandula Gunawardena ordered the police to use tough emergency laws to crack down on wholesale dealers who say they are unable to sell rice at prices specified by the government.

On Thursday, Gunawardena set a maximum retail price of the most popular Samba rice at 70 rupees a kilogram, but traders said it was below their cost.

The government has now set up a consumer court to punish dealers who violate the price ceiling.

Those who hide stocks or mislead the public by selling at a higher price are breaking the law, Commerce Secretary R.M.K. Ratnayake said.

“So far, we have not had to use force to break open rice stores. We are still talking to the traders to convince them to issue stocks at the new price,” Ratnayake said. However, some wholesale shops in Colombo remained closed on Monday while talks were on to reach a price compromise.

“We cannot sell our remaining stocks and suffer colossal losses,” P.K. Samy, president of the Pettah Rice Traders Association said. He said the state-set price is 20 rupees a kilogram too low.

Sri Lanka has experienced sharp food price rises with year-on-year inflation hitting 28.1 per cent last month — its highest level in the past decade.

The country is also seeking new rice supplies from Pakistan, India and Myanmar after recent rains damaged local crops.

DROUGHT HITS THAI RICE REGION: More than 10 million people in parts of Thailand’s rice bowl region have been hit by drought, the government said on Monday, causing further concerns as prices of the staple grain soar.

Thailand’s Disaster Prevention and Mitigation department reported in Bangkok that 55 of the kingdom’s 76 provinces were struggling with drought, mostly in the central, north and northeastern regions.

More than 151,000 rai (60,000 acres) of farmland has been affected, they said in a statement, including half of the key central rice growing provinces.

Vichien Phantodee, a member of the Thai Farmers Association, said rice farmers have been trying to exploit skyrocketing prices and an increased global demand for the grain.

“Farmers want to plant more rice because the price is so good,” Vichien said. “But the drought does affect rice production, particularly for farmland outside the irrigation areas.” The first rice harvest of the year in Thailand, the world’s biggest rice exporter, traditionally ends in late March or early April. Farmers then let the fields recover, before planting a second harvest in May.

But as export and domestic rice prices hit record highs, many farmers are trying to plant a third crop or move their second harvest forward to take advantage of the boom.

The benchmark Thai variety, Pathumthani fragrant rice, was priced on April 9 at $956 per tonne for export, up about 50 per cent from a month earlier, the Thai Rice Exporters Association said in its price survey.

International demand for Thai rice has soared after other top exporters, Vietnam and India, imposed limits on exports to ensure domestic supply.—AFP